Nukkleus Inc. (NASDAQ:NUKK) shares are moving higher Wednesday on continued momentum following the company's announcement that it took a 51% controlling stake in defense acquisition firm Star 26 Capital. Here's what you need to know.
What To Know: Nukkleus on Tuesday said it acquired a controlling stake in Star 26, which holds 95% ownership in RIMON, an Israeli supplier of critical components for the Iron Dome missile defense system and a developer of tactical vehicles for defense and intelligence agencies.
The move marks a strategic shift from the company's fintech roots into the defense sector. The deal, finalized over the weekend, has a total purchase price of $26 million, including cash, a promissory note Nukkleus's common stock and warrants to purchase additional shares of Nukkleus. The company also secured an option to acquire the remaining equity in Star 26.
RIMON's operations include exclusive distribution agreements for generators, masts and lighting solutions, as well as the design and engineering of reconnaissance vehicles, mobile command units and satellite platforms. Newly appointed Nukkleus CEO Manny Shalom highlighted the growth potential of the defense sector, driven by geopolitical tensions in the Middle East and the war in Ukraine, citing increased defense-related investments in Israeli firms.
"RIMON's expertise in critical defense systems, coupled with its established partnerships with leading defense exporters like Rafael and Elbit Systems, strengthens Nukkleus's capabilities in delivering innovative defense solutions," Shalom said.
The company aims to leverage RIMON's defense expertise and partnerships to capitalize on U.S. and Israeli market opportunities while pursuing acquisitions and financing initiatives to drive growth.
Under the company's full expansion strategy, Nukkleus plans to integrate Star 26 into its business structure, expand operations and act as a Merchant Bank for companies in banking, real estate and coworking spaces.
NUKK Price Action: Nukkleus shares have been halted for volatility several times in Wednesday's session. The stock was up 319.6% at $49.85 at the time of publication, according to Benzinga Pro.
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